Katy council boosts property tax exemption

Seeking to keep tax bills flat for residents who otherwise might be priced out of their homes by rising home values, the Katy City Council has increased the property tax exemption for residents older than 65 or with disabilities.

The unanimous vote Monday increased the exemption from $70,000 to $80,000 and is expected to affect about 1,000 residents in the town of 15,000 west of Houston, said City Administrator Byron Hebert. It is the third consecutive year that the council has raised the exemption value and is part of a long-term plan to reach $100,000.

"The property values are going up," Hebert said.

Under state law, home­owners are eligible for a standard homestead exemption on 20 percent of the appraised value on their primary residence. That means homeowners don't have to pay taxes on one-fifth of a home's value.

People older than age 65, or who have a disability, receive an additional exemption on their home's value. Cities, counties and other taxing entities can increase the value of that exemption, which a handful have done in recent years as property values have soared.

Several legislators also have proposed expanding exemptions as part of efforts to provide property tax relief.

"Property taxes have just skyrocketed because of the increased valuations," said Mike Sullivan, Harris County's tax-assessor collector. "It doesn't seem to have spared anyone."

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He noted that rising home values can be particularly difficult to manage for those on a fixed income, like many seniors and people with disabilities. That has been the primary motivation for some local governments to increase the value of their special exemptions.

Appraisal districts for Harris and Fort Bend counties have reported that many residential property values in the Katy area have been increasing by more than 10 percent a year. In the Harris County portion of the Katy area, about one-third of all appraised values hit the state's 10 percent cap, which is designed to limit how much tax bills can increase in a single year.

Combined with the standard homestead exemption, the exemption increase approved Tuesday means qualifying owners of homes in Katy valued at $100,000 or less will not have to pay any city property taxes.

The highest exemption in Harris County is $200,000 and was approved by Sagemeadow Utility District east of Pearland, said Justin Concepcion, spokesman for the tax assessor-collector. The neighboring cities of Southside Place and West University Place both offer exemptions of $165,000, although Southside's does not include people with disabilities. The city of Houston raised its exemption to $80,000 in 2013 after a divisive debate required council members to sacrifice budget wishes in a compromise with the mayor.

Hebert noted that the increased exemption is related to plans for the city of Katy to reduce its property tax rate by 2 cents every year until 2018 so long as property values remain strong.